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5 Challenges Facing Education-Tech Startups

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5 Challenges Facing Education-Tech Startups




Education technology is a super-fast growing industry. From content-management platforms to interactivity apps and everything in between, edtech startups are popping up frequently — and finding success.

But getting started in edtech isn’t all that easy. There are serious challenges startups must overcome to be successful, as in any industry. Below are five challenges facing edtech startups and how they can be overcome:

1. The edtech industry has exploded.

The growth is great because the industry is on everyone’s radar, but at the same time, it means edtech startups face hundreds of competitors. How can a company stand out in such a crowded space?

Related: Will You Be the Next Great Education-Tech Entrepreneur?

Solution: Another learning management system or classroom engagement tool isn’t going to make waves, gain funding or get very far. Like any other industry, edtech startups need a differentiator to succeed. Innovative tools and services that solve unmet needs in education will come out on top, while copycat companies will fade into the background.

2. Funding for edtech startups is not extraordinarily high.

EdSurge estimates U.S. edtech investment hit $1.36 billion in 2014. Although that’s a new record for the industry, there are already a lot of players, and newcomers may find it difficult to get the funding their startups need. There may not be enough funding to go around.

Solution: Instead of relying on venture capitalists, become a revenue-generating company. It can be a healthier model.

3. The education industry is slow to move.

Although education across the country is evolving, there’s a lot of resistance to change at every level, and innovation in public education can be blocked or slowed at the hands of multiple stakeholders from teachers to taxpayers to boards of education and local government officials.

Solution: Demonstrate the real value and benefits of edtech with data. To make changes in education, startups need to make a strong case to doubtful decision-makers.

Related: LinkedIn Inks $1.5 Billion Deal for Online Education Company Lynda

4. Most schools don’t have excess money in their budgets.

Edtech startups need to develop pricing strategies that potential customers can afford. It’s a tricky equation because schools, especially public ones, tend to have very limited budgets.

Solution: Think of innovative monetization models to bring down the price to an affordable level for users. The products and services can even be free to users and monetized through partnerships and other models.

5. Academia is more about theory and less about action.

In the startup world, it’s all about deliverables, action items, getting things done and iterating. In the academic world, it tends to all be about discussing, philosophizing and debating. It’s a bit of a clash.

Solution: To meld the thought-orientated academic world with the action-oriented world of startups, there needs to be clear communication of value points from startups to academic decision-makers. Have a team that can relate to the academics. Keep an academic on staff as a co-founder or other upper-level position to help bridge the gap.



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